Fine Living Top 10: Overlooked Tax Havens - Part I

When people think about tax havens and storing away money, they generally think of two places: Switzerland and the Cayman Islands. Both are international money centers that pride themselves on their confidentiality and their avoidance of geopolitical situations.

In Switzerland, privacy laws within the banks keep the tax authorities from looking into your account. However, the growing influence of the Organisation for Economic Co-operation and Development (OECD) is putting pressure on this nation and many others in the Caribbean (including the Cayman Islands) to be more transparent about earnings and interests.

While these two places stand out as the most recognized places to hide your earnings, they may not be the most suitable for your investments. In this time of enormous pressure from the international community, it may be wise to look to the less obvious places.

In general, a tax haven is defined as a place where taxes are levied at low rates or not at all, with the most popular ways of avoiding taxes being to set up residence there or to establish an offshore company.

Number 10

Campione d'Italia

Campione d’Italia is a small enclave of Italy that is surrounded by Switzerland. Although the area is technically a part of Italy, it enjoys a special status: Residents enjoy no income taxes, and the area makes use of Swiss banks and facilities.

The area is located an hour’s drive from Milan, and is thus very accessible. As gambling laws are less stringent than in either Italy or Switzerland, the area derives much of its revenue from such activities.

The downside is that you may have to travel to Campione d’Italia to set things up, as the enclave seeks to downplay its status as a tax haven.

Number 9

Andorra

Andorra is a small country located between France and Spain. It’s a great place to put your money since there are no taxes on income, inheritance, capital gains or capital transfer. In addition to these benefits, bank accounts can be kept secret for foreigners, and interest and dividends are not taxed. For these reasons, Andorra has been scorned by the OECD; however, because it is not a member of the EU, it has largely been able to escape the pressures to comply.

Unlike many other places, Andorra does have a business tax and doesn't have a company registrar, so its prominence has been limited by the lack of offshore company formations. As such, people who want to use Andorra as a discretionary place to store their money may need to do so by setting up residence there.